Proposal could clear obstacle to outcomes-based contracts

The Duke-Margolis Center for Health Policy has released a proposal that could remove the biggest barrier to the widespread adoption in the U.S. of value-based payment contracts for medicines. A technical fix to the Medicaid best price rule, the proposal could be implemented by CMS administratively or mandated by Congress.

The best price rule requires that manufacturers provide rebates to Medicaid of either 23.1% of the average manufacturer price (AMP), or if it is larger, the difference between the AMP and best price that is available to any customer in the U.S. The rebate amount is changed to 17.1% for drugs labeled exclusively for pediatric use...